Fitch upgrades Eletrobras

Fitch Ratings said it upgraded the long-term foreign and local currency issuer default ratings of Centrais Eletricas Brasileiras SA (Eletrobras) and its wholly owned subsidiary, Furnas Centrais Eletricas SA, to BB- from B+.

The agency also upgraded the companies' long-term national scale ratings to AA(bra) from AA- (bra).

The outlook is stable.

Fitch said the upgrade reflects its view of the Federative Republic of Brazil's (BB-/stable) continuing support of Eletrobras through existing debt guarantees, with a relevant portion of the loans coming from federal banks, and the gradual strengthening on Eletrobras' standalone credit profile after some cost saving measures, which may be reinforced in case of the relevant asset sales program conclusion.

The agency Fitch considers Eletrobras' standalone credit profile commensurate to a B- issuer default rating which, based on the Government Related Entities methodology and the three notches distance to Brazil's issuer default rating, leads to the equalization of the ratings.

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